The Brand Premium

The Review of Financial Studies, forthcoming

Review of Financial Studies, forthcoming

Review of Financial Studies, forthcoming

57 Pages Posted: 8 Jul 2022 Last revised: 19 Jul 2024

Date Written: June 26, 2022

Abstract

We highlight the limitations of using cumulative advertising expenses as an input measure of brand value. Using two output measures—Interbrand's data and a novel text-based measure—we find that an equal-weighted portfolio of top brands yields an annual abnormal return of 3%. The excess returns are driven by companies that develop their brands internally. Intangible factors proposed in the literature have no explanatory power for the premium. Analysts underestimate the future earnings of top brands, leading to significant excess returns following earnings announcements. We find no abnormal returns associated with the input measure of brand value.

Keywords: Brand value, intangible assets, excess returns, undervaluation, Textual analysis

JEL Classification: G01, G11, G14

Suggested Citation

Boustanifar, Hamid and Kang, Young Dae, The Brand Premium (June 26, 2022). The Review of Financial Studies, forthcoming, Review of Financial Studies, forthcoming, Review of Financial Studies, forthcoming, Available at SSRN: https://ssrn.com/abstract=4146667 or http://dx.doi.org/10.2139/ssrn.4146667

Hamid Boustanifar (Contact Author)

EDHEC Business School ( email )

393 Promenade des Anglais – BP 3116
Nice, 06202
France

Young Dae Kang

The Bank of Korea ( email )

Korea, Republic of (South Korea)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,318
Abstract Views
3,994
Rank
29,552
PlumX Metrics